In this episode of Truth About FX, Walter pulls down the curtain on the subject of switching to lower timeframes to get more trades. According to him, there are three basic reasons: science, your broker, and lifestyle. Walter also touches on “addiction mindset” and the real psychology behind the theory.

Download (Duration: 7:03 / 8.08 MB)

In This Episode:

00:58 – part of your brain

02:19 – addiction mindset

04:06 – fight your psychology

05:05 – fighting the current

06:06 – it’s a choice

Tweetables:

Enjoy life. Do not spend all your time in front of the charts. [Click To Tweet].

Don’t go upstream and fight the current.  [Click To Tweet].

Better decisions come when you’re away from the market. [Click To Tweet].

Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter. I guess this speaks to the fact that you trade longer timeframes so if you can make money on longer timeframes, why don’t you just switch to a lower timeframe, get more trades and make more money?

Walter: Great question. This is a number one question and the number one concern or problem that people say when they look at my trades. There’s a couple of things going on here.

There is, basically, three reasons why. Number one is we know from neuroscience that when you trade the lower timeframes, you are activating a different part of your brain than when you are trading the higher timeframe.

What I am talking about is when you sit in front of a computer, you take a trade and you watch every candle print, you are in the same mode that, literally, like a crack at it as in… You know what I mean? Not to be rude to anybody, crack at it myself, but that is basically what is happening.

You can look up the nucleus accumbens and trading. Google that and you’ll see. I’ll put a link on the shownotes. Basically, that is number one. Number two is if you are worried that your broker is doing funny business and slipping you… And I can tell you that I’ve done test on brokers, brokers that I know like I know the owner of the company — two brokers I’ve done test with and I thought they were a legitimate blah, blah, blah but they’ll slip you when you start winning.

If you are trading a system like I used to where you go for a profit every 3 pips — which is crazy –when they start slipping you a pip and a half, think about it. You’ve lost half of your profit.

When you start getting slipped and tagged your stop loss, tagged even though it shouldn’t been or whatever because you are trading lower timeframes, it is basically easier for your broker to mess with you.

That is just reality. Number one is I don’t want to get into that “addiction mindset”. Number two is I know that brokers, when you start making money after about thirty days, they will start slipping you.